restructuring capitalism is possible

This book has applied what I believe is the immensely powerful idea of a mission to solving the ‘wicked’ problems we face today. In it, I have argued that tackling grand challenges will only happen if we reimagine government as a prerequisite for restructuring capitalism in a way that is inclusive, sustainable and driven by innovation.

First and foremost, this means reinventing government for the twenty-first century – equipping it with the tools, organization and culture it needs to drive a mission-oriented approach. It also means bringing purpose to the core of corporate governance and taking a very broad stakeholder position across the economy. It means changing the relationship between public and private sectors, and between them and civil society, so they all work symbiotically for a common goal. The reason for the emphasis on rethinking government is simple: only government has the capacity to bring about transformation on the scale needed. The relationship between economic actors and civil society shows our problems at their most profound, and this is what we must unravel.

We can start by recognizing that capitalist markets are an outcome of how each actor in the system is organized and governed, and how the different actors relate to one another. This holds for the private and public sectors and for other sectors such as non-profits. No particular kind of market behaviour is inevitable. For example, the market pressure often cited as forcing a business to neglect the long term in favour of the short term, as too many companies do today, is the product of a particular organization of the market. Nor is there anything inevitable in government bureaucracies being too slow to react to challenges such as digital platforms and climate change. Rather, both are outcomes of agency, actions and governance structures that are chosen inside organizations, as well as the legal and institutional relationships between them. It is all down to design within and between organizations.

Capitalism is, indeed, in crisis. But the good news is that we can do better. We know from the past that public and private actors can come together to do extraordinary things. I have reflected on how, fifty years ago, going to the moon and back required public and private actors to invest, to innovate and to collaborate night and day for a common purpose. Imagine if that collaborative purpose today was to build a more inclusive and sustainable capitalism: green production and consumption, less inequality, greater personal fulfilment, resilient health care and healthy ageing, sustainable mobility and digital access for all. But small, incremental changes will not get us to those outcomes. We must have the courage and conviction to lift our gaze higher – to lead transformative change that is as imaginative as it is ambitious, aiming for something far more ambitious than sending a man to the moon.

To do this successfully, governments need to invest in their internal capabilities – building the competence and confidence to think boldly, partner with business and civil society, catalyse new forms of collaboration across sectors, and deploy instruments that reward actors willing to engage with the difficulties. The task is neither to pick winners nor to give unconditional handouts, subsidies and guarantees, but to pick the willing. And missions are about making markets, not only fixing them. They’re about imagining new areas of exploration. They’re about taking risks, not only ‘de-risking’. And if this means making mistakes along the way, so be it. Learning through trial and error is critical for any value-creation exercise. Ambitious missions also have the courage to tilt the playing field.

If government is indeed a value creator that is driven by public purpose, its policies should reflect and reinforce that. Too many green policies today are just minor adjustments to a trajectory that still favours the old waste-prone behaviours and the financial casino that worsens inequality. A healthy economy that works for the whole of society must tilt the playing field consistently to reward behaviours that help us achieve agreed and desirable goals. That means achieving coherence in a multiplicity of fields, from taxes to regulation, from business law to the social safety net.

As emphasized throughout the book, it is key to not pretend that social missions are the same as technological ones. With challenges that are more ‘wicked’ it is essential that moonshot thinking is linked with support to underlying government systems. For example, a moonshot around disease testing or health priorities must interact closely with the public-health system, not replace or circumvent it. Similarly, a moonshot around clean growth must interact with transport systems and planning authorities and understand behavioural change. Thus it is critical to perceive missions not as siloed projects but as being intersectoral, bottom-up, and building on existing systems (such as innovation systems, among others).

Governments cannot pursue missions alone. They must work alongside purpose-driven businesses to achieve them. As I’ve argued in this book, this requires addressing one of the biggest dilemmas of modern capitalism: restructuring business so that private profits are reinvested back into the economy rather than being used for short-term financialized purposes. Missions can accelerate this shift by shaping expectations about where business opportunities lie and also getting a better return for public investment. In this sense they can begin to walk the talk of stakeholder value. This means creating a more symbiotic form of partnership and collaboration in different sectors, whether in health, energy or digital platforms. A market-shaping perspective requires governing these interactions so that intellectual property rights, data privacy, pricing of essential medicines and taxation all reflect what needs to happen to reach the common objective. In health that must mean health innovation driven by the mission of better health care for all; in energy it must mean divestment from fossil fuels and the creation of public goods like green infrastructure and green production systems that protect the earthly oasis that Armstrong referred to; and in the digital domain it must mean the use of digitalization to improve the access of all people to the power of the technologies of the twenty-first century – while ensuring both data privacy and that our welfare states are strengthened, not weakened, by digital platforms.

Doing capitalism differently requires reimagining the full potential of a public sector driven by public purpose – democratically defining clear goals that society needs to meet by investing and innovating together. It requires a fundamentally new relationship between all economic actors willing and able to tackle complexity to achieve outcomes that matter.